F01536
Long

[VIX] - RSI 14 Bullish Divergence

AMEX:UVXY   PROSHARES TRUST II ULTRA VIX SHT TRM FUTR ETF
There is a small VIX bullish divergence on RSI , while reaching support trend line . Stochastics are about to turn as well.

The divergence is small but if you look at the DJ, it is hitting the resistance line formed by highs on 26 January and 11 June (not shown on this graph). This suggest a DJ reversal which will push up VIX . This is why i put more confidence in this VIX RSI divergence although it is a small one.

I'm playing this trade with a VXX 24 AUG 38 Call option @ 1.55 USD and UVXY 21 SEPT 12 Call option @ 1.29 USD
I rather use options because timing is uncertain (stochastics might take a couple days to reverse completely) and you need a margin of safety.
Comment: For the record, i took some more UVXY 12 call 21 sept @ 1.13$ and 1.05$

And also same UVXY but 10 call @1.62$ and 1.65$

Now just waiting :)
Comment: 1.62 and 1.55 sorry :)
Comment: VXX option sold 1.11 today with loss (bought 1.55). UVXY 12 call sold 1.40 (bought 1.29 - 1.13 - 1.05). .. I keep the UVXY 10 call bought 1.62 & 1.65 that are quoted now around 1.90. But these can be sold.

Overall, this is the 3rd trade that turns to be winning even if profit is not huge.
I must confess the purchase of the call were too early, but given the long maturity, it finally turned into a small profit.

#TRADES : 3 ----- GAIN (3) / LOSS (0) / OPEN (0

Comments

VXX option sold 1.11 today with loss (bought 1.55). UVXY 12 call sold 1.40 (bought 1.29 - 1.13 - 1.05). .. I keep the UVXY 10 call bought 1.62 & 1.65 that are quoted now around 1.90. But these can be sold.

Overall, this is the 3rd trade that turns to be winning even if profit is not huge.
I must confess the purchase of the call were too early, but given the long maturity, it finally turned into a small profit.

#TRADES : 3 ----- GAIN (3) / LOSS (0) / OPEN (0)
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I had good experiences with RSI divergence on UVXY, but it is possible to see low 9.50s before bouncing, which would be even more potential...

for the other indicators, they oftenly(rigged) disappoint because of the continuous manipulation by large institutional desks...
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F01536 mfournier3
@mfournier3, thanks for your comment! Yes it is likely going slightly down, that’s why I only took 1 option of each, I will add more if they get cheaper. With sept maturity we have time for a rebound :-) have a nice weekend!
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